Tuesday, May 1, 2007

Virginia’s viatical settlements law upheld

Virginia’s law regulating viatical settlements has been upheld by a panel of the 4th U.S. Circuit Court of Appeals.

In a viatical settlement, a terminally ill patient sells a life insurance policy to a third party that picks up the premium payments and collects the proceeds when the patient dies, notes The Associated Press.

Virginia’s law requires a company buying policies to pay 60 to 80 percent of face value. A Texas-based company that paid 26 percent of a policy’s face value to a dying AIDS patient unsuccessfully challenged the Virginia regulatory scheme in Life Partners Inc. v. Morrison (VLW 007-2-067).